The LPDD team is proud to announce the publication of a new model law providing state income tax credits for EV charging stations. The model law was peer reviewed by Tracey Roberts of Samford University. It is available to be viewed here.
Excerpted from the introductory memorandum to the model law:
Currently, the federal government provides a credit against federal income tax for 30% of the cost of an electric charging station for residential and commercial applications. However, that credit is scheduled to expire on December 31, 2021. Whether or not the federal tax credit program is renewed, States have a critical role to play in sparking the robust development of electric vehicle charging infrastructure nationwide. The model law would establish a credit against state income tax and further incentivize the development of EV charging infrastructure in the state.
The model law provides for different levels of tax credits, as follows: (i) up to a 20% credit for the cost of the purchase and installation of new electric vehicle charging equipment that is at least a “Level 2” charger, without restriction on use or location; (ii) up to a 30% credit for the cost of the purchase and installation of new electric vehicle charging equipment charging equipment that is at least a “Level 2” charger and is made available to the public; and (iii) up to a 35% credit for the cost of the purchase and installation of new electric vehicle charging equipment that is at least a “Level 2” charger, and is made available to the public and located along a critical travel corridor designated by the tax administrator in consultation with the state’s transportation commissioner. (The credit amounts set forth in the model law are suggestions only, and would be at the discretion of state legislatures.)
The model law directs the state tax authority to promulgate implementing regulations, and in doing so to consider measures (including the scaling of tax benefits within the limits set forth in the statute) to encourage the installation of equipment that: (i) is capable of providing DC fast charging along critical travel corridors; (ii) has features making it convenient for use by the general public; (iii) is co-optimized with other electric vehicle charging networks; and (iv) is capable of tracking time of use or otherwise designed to benefit the electrical grid. The regulations must also include provisions for the recapture of credits allowed for publicly available charging stations and stations located along critical corridors in the event that those chargers are removed from service within one year after initial installation. The credit program under the model law terminates on December 31, 2030.